Article by John Derbyshire

A friend of mine who is an actor tells me that when two actors encounter each other in the street, their usual salutation is not: “Good morning!”  or “How ya doin’?”  It is much more likely to be:  “Are you working?”

The rest of us had better start getting into that showbiz mentality.  Ladies and gentlemen, we are in a recession.  I know this because I have what I think is called “a leading indicator”.  Until recently I was a systems manager for a Wall Street firm, hiring and firing programmers and analysts.  As NRO readers well know, I am an amiable and open-hearted sort of guy, so I stayed on good terms with them all, even the ones I fired.  Well, this past few weeks the emails have been trickling in.

Hi, Derb!  Remember me?  I coded up that cost-of-carry data model for you back in ’98, the one that got us a pat on the back from the CFO.  Then I moved on to Supertronic Systems.  Well, guess what? — Supertronic just laid me off.  Know any openings?  Got any contacts?  Wd really appreciate a lead.  We are all fine — new baby boy last March!  Love to Rosie & the kids.

At such times I get the Captain Ericson feeling.  If you have read Nicholas Monsarrat’s The Cruel Sea — the best WW2 novel I know — you will recall that Ericson is on the bridge the night his ship, the corvette Compass Rose, is struck by a torpedo.  Among the many sounds that followed, there was one that particularly distracted him, coming from a voice pipe connecting the fo’c’s’le, where the torpedo had hit, with the bridge.  It was the screams of the men in the fo’c’s’le, trapped and drowning in pitch darkness:  “[A]n agonized animal howling, like a hundred dogs going mad in a pit...  But there was no help for them: with an executioner’s hand, Ericson snapped the voice-pipe cover shut, cutting off the noise.”  Sorry, guys.

What do you do in a recession?  Depends whether you are one of those who get recessed or not.  If you are among those unlucky ones, you fire off emails like the one above, send out faxes and phone calls, hustle and network, max out the credit card lines, cancel magazine subscriptions (uh-oh) and hope for the best.  If you’re not, but are in the sea-lanes where the U-boats are known to prowl, you try to stay above decks as much as possible, kiss up to the Captain, and say your prayers.  (Old Chinese proverb: “When times are good, people don’t burn joss:  When times are hard, they hug Buddha’s foot.”)  If you’re safe and dry on shore, you get your house fixed.  Building contractors, down there at the bottom of the food chain, suffer a sort of magnifying effect from economic ups and downs.  Remember trying to get your roof mended back in ’97?  How you had to keep calling them?  And when they finally deigned to show up, how you had to grovel to them, make coffee for them, let them play their vile godawful music at earsplitting volume while they worked?  How they walked off with half your tools and left scraps of roofing fabric all over the lawn?  Well, try hiring them now.  They’ll be round in a jiffy, work as quietly as church mice, clean up the lawn afterwards, and even, if you casually mention it, mow it for you afterwards!

And who are these people who don’t have to worry about recessions?  Why, they are the government people.  I don’t know how it is in your neck of the woods, but out here in Suffolk County, the term “power couple” is defined to be a cop married to a schoolteacher.  And that’s just while they’re working — you don’t even want to look at the retirement packages their Godzilla unions have negotiated for them from the trembling guardians of the public fisc.  Private enterprise?  Fuhgeddaboutit.  Recession?  What recession? 

Don’t get me wrong — readers always do when I go on one of my rants about the government people.  We need cops.  We need schoolteachers.  Probably — what do I know? — we need Assistants to Administrative Assistants (Grade 3.2c) in the U.S. Department of Administrative Assistance.  God bless them every one.  I do not want to shoot all public-sector workers, nor even (except on bad days) put them in camps and feed them oatmeal gruel.  I only want to point out... 

Well, I don’t need to point it out, since Calvin Coolidge pointed it out once and for all back in 1925, in a speech to the American Society of Newspaper Editors.  Newspapers, said Cal, are great business enterprises earning large profits and controlled by men of wealth. In defense of that connection, he went on:  "After all, the chief business of the American people is business."  You all know that bit.  In subsequent remarks that never get quoted, he added:

"The accumulation of wealth cannot be justified as the chief end of existence.  ...  So long as wealth is made the means and not the end, we need not greatly fear it.  ...  It is only those who do not understand the American people who believe that our national life is entirely absorbed by material motives. We make no concealment of the fact that we want wealth, but there are many other things we want much more. We want peace and honor, and that charity which is so strong an element in all civilization. The chief ideal of the American people is idealism. That is the only motive to which they give any strong and lasting reaction."

This great and noble conception, so beautifully articulated by one of the most thoughtful of all Chief Executives, is America’s unique contribution to human civilization.  The business of this country is business:  not as an end in itself, but so that, sufficiently wealthy to have the leisure for reflection, Americans can lift their eyes from the brute struggle for survival to contemplate higher things and help others.

Unfortunately, in their zeal for fairness, justice and equality, Americans have in recent decades thrown a lot of wrenches into this wonderful wealth-creating machine.  In one of my recent dispatches from China I wondered aloud why cell phone service is so much more expensive in America than it is over there.  The answer was emailed in by a reader who actually runs a cell phone company:

It is ... very expensive to run a cell phone company.  FCC Licenses:  In the US providers pay for these.  In many countries the wireless providers are given the rights to the frequency.  We don't really pay for the rights, we collect extra money from you to give to the FCC/US Govt.  Cell Sites:  These are controversial towers.  Not only are they expensive to build and maintain, the NIMBYs out there sue us every chance they get.  We got sued by a lady who claimed the cell tower we had a couple hundred feet from her house gave her kid a brain tumor.  Unfortunately, we had to pay our lawyers to go tell her and the judge that the site had never even been powered up.  ...  Regulation:  There are hundreds of small government agencies that can shut us down when they feel like it.  It is impossible to keep up with the regulators in every state.  Iowa has a commission that makes sure we are not disturbing the historical heritage of the state.  So does Georgia.  Vermont?  We hired a team of lawyers who specialize in building towers in Vermont.  Unless you fill out your applications and pay a "fee" (bribe) to these [expletive deleted] bureaucrats they shut your whole system off.  911:  Unfunded mandate.  Develop the technology and deploy by October or else...

Not so much labor-intensive as lawyer-intensive.  There, in one corner of one industry, you see, naked and exposed, the Iron Triangle that shackles and retards business development in the U.S.:  Taxation, Regulation, Litigation.

There are, of course, plenty of people who know this and fight against it.  I draw your attention to just one such group:  The Club for Growth, which agitates for less government and lower taxes, and offers help and support to pro-growth candidates for public office.  I went to a bash they held last June to commemorate the Reagan tax cut, and found myself sitting there listening to the speeches, thinking:  Why would anyone not be with these people?  I  suppose a New York Times editorial writer would imagine the participants at such an event to be smug, overfed cartoon capitalists — monocles, cummerbunds, cigars, avoirdupois — taking a ten-course break from grinding the faces of the poor.  Well, there were a few cigars, but very little smugness and not much excess body fat.  My date for the evening, venture capitalist Jim Woodhill, is as fit as a fiddle.  He needs to be:  financing software start-ups is strenuous work.  Jim has more, and more imaginative, ideas for lifting poor people out of poverty than ever are dreamed of in Ted Kennedy’s philosophy.  He has thrown a lot of his own time and money into those ideas, too.  Many of the other people in the room that evening have done the same, in the same spirit — the Coolidge spirit, the American spirit.

Recessions come and go, bubbles swell and burst, the business cycle turns.  Its troughs would be shorter, though, and its peaks higher, and its recoveries stronger, and the good that American capitalism does would be more widespread and more firmly established, if American business were not dragging that clanging, banging, ankle-chafing Iron Triangle along behind it.

-----------------------------------------